Canopy Rivers Inc. has invested $4-million in U.S. cannabis data company Headset Inc., marking the firm’s first non-plant-touching investment, and its first direct foray into the U.S.
Rivers, the partially owned venture capital arm of Canopy Growth Corp., had previously avoided putting money into U.S. cannabis companies. Rivers is listed on the TSX Venture Exchange, which maintains strict rules against participating in the marijuana market south of the border. The company’s bet on Washington-state-based Headset, however, appears to show Rivers’ willingness to invest in ancillary firms, as long as they don’t directly handle marijuana in contravention of U.S. federal drug laws.
Headset collects point-of-sale data in Colorado, California, Nevada and Washington, largely to help dispensaries and producers manage inventory and pricing. It recently partnered with U.S. investment bank Cowen Inc. to sell cannabis market data to the financial community, and has begun expanding into Canada. Headset, like competitor BDS Analytics, is trying to become a kind of Nielsen for cannabis, providing the market intelligence necessary for the industry to mature.
“As companies compete to capture mind share in this nascent space, understanding the levers that influence purchase decisions and ultimately guide price and brand success is critical,” Narbe Alexandrian, Rivers’ vice-president of business development, said in a news release Tuesday morning.
Headset, which was founded by the same people who co-founded cannabis media and review website Leafly, raised $12.1-million in its series A financing, the company announced Tuesday. Poseidon Asset Management and AFI Capital Partners led the round of investment, alongside Rivers.
The Headset investment announcement comes the morning after Rivers announced that it has secured an $80-million bank debt facility from the Bank of Montreal, CIBC and Concentra Bank to expand its greenhouse joint venture in Leamington, Ont. Rivers owns 49 per cent of the joint venture, called Pharmhouse. A numbered company directed by well-known produce executive Paul Mastronardi, CEO of Sunset brand vegetable-grower Mastronardi Produce Ltd., owns the other 51 per cent.